- FTSE 100 closes 26 points higher
- Wall Street higher as data eases Fed rate worries
- ECB raises interest rates by 25 basis points
4.45pm: FTSE finishes higher
At the close, the FTSE 100 had added 26 points to reach a session high of 7,628 for a 0.3% gain on the day.
Stocks recouped their losses following the ECB hike, Chris Beauchamp at IG noted.
"The Fed’s more hawkish talk last night unnerved investors, but by contrast the ECB’s move to boost interest rates has not unduly worried markets," Beauchamp wrote. "The FTSE 100 has made headway, but below the surface a swathe of UK-focussed firms have seen their share price fall as worries about the BoE’s need to tighten further grow stronger."
4.15pm: New session high
With just 15 minutes of trading to go in London, the FTSE 100 index had stretched up to fresh session highs as Wall Street pushed higher, managing to take Wednesday’s hawkish Federal Reserve comments in its stride.
Michael Hewson, chief market analyst at CMC Markets UK noted: “The FTSE 100 is managing to hold up reasonably well despite weakness in basic resources and financials, with gains in health care, energy and consumer staples helping to offset that."
He added: "It’s been a good day for the retail sector with a couple of positive trading updates, from ASOS and H&M.
ASOS shares have seen some decent gains today after reporting an 11% decline in Q3 sales of £859m, which was higher than consensus expectations. The company also reported that it had managed to return to profit during the quarter, and said it was on course to deliver adjusted EBIT guidance of between £40m and £60m for the year.
"H&M shares are also higher despite reporting flat sales growth for Q2 with the company citing unfavourable weather conditions, compared to last year. On a more optimistic not the Swedish retailer noted that early trading in Q3 had seen a strong start.
"On the downside health and safety tech firm Halma shares are lower after reporting full year results that came in below expectations. Despite reporting a 21% rise in revenues, statutory profit before tax fell 4% to £291.5m. This was largely due to last year’s profits getting a £34m boost from a disposal which flattered the numbers. Today’s decline seems somewhat overdone even accounting for some concerns over margins which were caused by supply chain difficulties."
3.50pm: Gold loses some glitter
The gold price fell to new 3-month lows against all major currencies on Thursday, dropping below $1,930 an ounce for the first time since mid-March after the Federal Reserve held its key interest rate unchanged as expected but hiked its 'dot plot' guidance for the cost of borrowing by year's end after its June policy meeting.
However, by late afternoon, the gold spot price had recovered some of its poise to trade around $1,955 an ounce, according to Bullion Vault data.
Craig Erlam, senior market analyst, UK & EMEA, at OANDA commented: “The yellow metal appeared to be responding to the hawkish pause from the Fed as markets appeared to price out rate cuts this year alongside a strong chance of another hike in July.
“But it's recovered in the last couple of hours, perhaps alongside a strengthening euro which is pressuring the dollar. Jobless claims were also much higher than anticipated which possibly points to some cracks appearing in the labour market. Although as we've seen in recent months, that data can be noisy.”
He added: “If gold ends the day back in the $1,940-$1,980 range, it would perhaps be surprising given everything we've seen and heard this week. It will be interesting to see if that continues to hold as the narrative on the Fed does appear to have shifted in recent days. Unless of course, traders are gradually deciding to disregard its forecasts as they have in the past.”
3.30pm: Crude factors
Oil prices rebounded on Thursday afternoon after data showed a jump in refinery runs in top crude importer China, in spite of a weaker economic backdrop.
UK Brent crude rose 1.6%, to $73.64 a barrel, while US West Texas Intermediate (WTI) crude also added 1.6%, to $69.34 a barrel, with both benchmarks having shed 1.5% on Wednesday.
Data on Thursday showed China's oil refinery throughput in May rising 15.4% from a year earlier, hitting its second-highest total on record, although the economic outlook countered this, with China's industrial output and retail sales growth in May missing forecasts.
Also capping gains were fears that higher global interest rates will slow US and European economies and reduce oil demand.
The European Central Bank raised interest rates for the eighth successive time to a 22-year high as expected on Thursday. Meanwhile, although the Federal Reserve on Wednesday kept interest rates unchanged, the US central bank also signalled at least a half of a percentage point increase to borrowing costs by the end of this year.
Analysts expect oil prices to see support later in the year as voluntary cuts by OPEC+ countries implemented in May, and from Saudi Arabia in July, coincide with robust demand.
UBS expects a supply deficit of around 1.5 million barrels per day (bpd) in June and more than 2 million bpd in July.
"Once these deficits become visible in on-land oil inventories, we expect oil prices to trend higher," the bank said in a note on Thursday.
3.15pm: Mortgage matters
Nationwide Building Society will raise fixed rates on mortgages offered via brokers by up to 0.7 percentage points on Friday, the mutually-owned firm has told intermediaries in an email, Reuters has reported
The quoted rate offered by Nationwide on a 2-year fix for new borrowers, available for a £999 fee, will rise to 5.69% across most loan-to-value ratios, from 5.24% currently, the firm one of Britain's largest mortgage lenders, has said.
Lenders have re-priced home loan offerings repeatedly in recent weeks in a scramble to keep up with soaring funding costs, spurred by expectations for more interest rate hikes from the Bank of England, the monetary policy committee (MPC) of which meets again next week, as it battles stubbornly high inflation.
Earlier this week, HSBC also announced a shake-up in its mortgage line, with higher rates taking effect from on today, Reuters noted.
2.45pm: No real retreat across the pond
The FTSE 100 index extended its modest gains in midafternoon trading as US stocks started mixed as investors digested a trio of economic data a day after the Federal Reserve hit pause on interest rate hikes in June but indicated there may be up to two more increases in rates this year.
Around 15 minutes after the New York opening bell, the Dow Jones Industrial Average was up 69 points, or 0.2% at 34,348, having fallen notably on Wednesday, while the broader S&P 500 index added 0.1%, but the tech-laden Nasdaq Composite fell 0.2% – both of the latter having managed gains in the previous session.
Looking at today's mixed bag of US data, FOREX.com market analyst Fiona Cincotta noted: “On the one hand, retail sales unexpectedly increased by 0.3%, beating forecasts of a nought 0.1% decline in May. The data suggests consumers are still spending thanks to the solid US jobs market.
“Meanwhile, jobless claims rose more than expected to 262,000 ahead of the 249,000 analysts had pencilled in.”
On the jobless data, Validus Risk Management head of global capital markets Ryan Brandham commented: “This is the second consecutive elevated number following last week’s number, which was the highest in well over a year. If US labour markets are finally starting to soften, this lends some credibility to the Fed’s decision to pause yesterday.”
2.25pm: US data mixed
A trio of US economic data proved mixed, a day after the Federal Reserve adopted a hawkish stance on future interest rate hikes.
US retail sales grew at a month-on-month rate of 0.3% in May, according to the Department of Commerce, confounding expectations for a 0.2% decline, compared to an unrevised gain of 0.4% in April.
Excluding automobiles and parts, retail sales rose by 0.1%, in line with consensus.
Meanwhile, the US Department of Labor reported seasonally adjusted initial unemployment claims were steady over the week ending 10 June at 262,000, where economists had been expecting a decline to 245,000.
Secondary jobless claims, which are those not being filed for the first time and referencing the week that ended on the 3 June, rose by 20,000 to reach 1.775mln.
And the Federal Reserve Bank of Philadelphia's regional factory index reading fell to -13.7 in May, down from April's reading of -10.4,and lower than the consensus forecast for a reading of -12.3.
A drop in the sub-index for new orders to -11.0 from -8.9 accounted for most of the decline in the headline gauge. In parallel, the sub-index for prices paid eased to 10.5 from 10.9, while that for employment jumped to -0.4 from -8.6.
2.05pm: European rates move
One month ahead of the first anniversary of what has become its most aggressive tightening cycle on record, the European Central Bank has continued its fight against inflation and hiked its policy rate by 25 basis points, with the deposit rate now at 3.5% - a year ago, it stood at -0.5%.
Commenting on the ECB move, Daniele Antonucci, chief economist & macro strategist, Quintet Private Bank (parent of Brown Shipley) said: "While the Fed paused its rate hiking cycle yesterday, the ECB continued to hike."
"Even though today’s decision is in line with market expectations, the interesting thing is that wage and price dynamics appear to be mutually self-reinforcing while at the same time economic growth remains relatively lacklustre.
"This implies a tough trade-off between curbing inflation and mitigating any adverse impact from tighter financing conditions.
"Even though it has moderated from its peak, Eurozone inflation remains higher than in the US. What’s more, compensation per employee in the major countries of the currency block continues to accelerate, increasing the risk of further boosting underlying inflation.
"We expect the ECB to hike again in July before possibly pausing to take stock of the cumulative effects on the wider economy," he added.
1.30pm: A look at some of today’s movers
Risers
Eden Research - up 19% to 7.9p: Shares in Eden Research flourished to around an 18-month high after the sustainable biopesticides group revealed a new South American distributor deal.
Asos - up 12% to 370p: The beleaguered retailer shot up after better-than-expected results which pointed to a return to profitability.
Warpaint London - up 9% to 277p: Shares rose after it said that, as a result of a continued strong start to the year, its board now expects the group's full-year 2023 performance to surpass previous expectations by a significant margin.
Fallers
AMTE Power - down 70% to 15p The maker of lithium-ion and sodium-ion battery cells said it needs to raise new funds within the next four weeks. Following an announcement in December last year that it would need extra financing by April 2023 to meet operating costs, the company drew down a new £580,000 loan on 31 March and a £1mln convertible loan on 25 April.
Chaarat Gold - down 18% to 9.4p: Shares fell after the miner reported results which laid bare its low cash levels and revealed that two fatal incidents occurred during the year. Revenue for the Armenian miner, which also owns assets in the Kyrgyz Republic, was flat during the last calendar year at US$92.3mln, while underlying earnings (EBITDA) dropped 52% to US$6.5mln.
1.00pm: Weaker start expected on Wall Street
US stocks are expected to open lower on Thursday after the Federal Reserve hit pause on interest rate hikes but indicated there may be up to two more increases in lending rates this year as it battles to get inflation back into its target range.
Futures for the Dow Jones Industrial Average (DJIA) fell 0.2% in pre-market trading, while those for the broader S&P 500 index declined 0.4% and contracts for the Nasdaq-100 were 0.8% lower.
The main US indexes initially tumbled on Wednesday when the Fed made its rates announcement but comments from Chair Jerome Powell helped stem the selloff when he told a post-meeting news conference “the conditions that we need to see in place to get inflation down are coming into place.”
The DJIA retraced some of its losses to close 0.7% down at 33,979, the S&P 500 added 0.1% to 4,373 and the Nasdaq Composite rose 0.4% to 13,626. The small-cap Russell 2000 index slid 1.3% to 1,871.
“Mixed messages from the Federal Reserve provoked a mixed market reaction, while any thoughts of rate cuts this year finally evaporated,” commented Richard Hunter, head of markets at interactive investor.
“Although rates were unchanged for the first time in many months, the Fed surprised investors with a suggestion that two further rises could be in the pipeline this year, depending on ongoing economic data. The accompanying comments led investors to dub the decision as a 'hawkish hold' as Chair Powell gave an overview of the latest thinking," he added.
Today, market participants will keep an eye on further US data for indications of the duration of the Fed's current “pause,” said TickMill Group’s Patrick Munnelly.
“May's retail sales figures will be of particular interest, as April's numbers surprised on the upside, suggesting that consumer activity remains relatively strong.
“Although May is expected to show some weakness, core sales are anticipated to remain solid. Jobless claims will also be monitored, as they provide insights into employment market conditions and any potential easing of pressures in that area," he noted.
12.33pm: Consumers paying down debt ahead of rate rise says NatWest boss
NatWest Group PLC (LSE:NWG) chief executive Dame Alison Rose said UK households and businesses are over-paying mortgages and paying down debt as rates jump.
But speaking at the Goldman Sachs (NYSE:GS) European financials conference in Paris, Dame Alison said she was seeing resilience among the bank's customers and "very rational behaviour" from borrowers, despite nerves about the economy.
She said customers are becoming more confident despite the ongoing cost of living crisis and worries over rising interest rates.
She pointed out borrowers were over-paying on their mortgages and paying down more expensive debts as rates jump, with no signs yet of customers across the board struggling with repayments.
But she thinks the recent jump in mortgage rates will have some impact on margins and customer behaviour.
She said NatWest's "all-weather balance sheet" will help the group withstand any impact, as will the "still underlying, resilient performance from our customers"
Her comments come amid turmoil in the mortgage market as lenders pull and re-price deals due to market forecasts for rates to keep rising.
Dame Alison noted: "We're not seeing any material signs of distress."
But she said lower income households are "really struggling with high inflation and high interest rates".
"Typically these are not significant borrowers with us," she added.
12.06am: Bank of England to review forecasting methods after criticism
The Bank of England has launched a review of how it makes and uses economic forecasts after facing criticism from MPs for repeatedly failing to predict the rise and persistence of UK inflation.
In a letter on Wednesday, David Roberts told the House of Commons Treasury committee that the central bank’s governing body, which he chairs, had in May decided to commission a broad external review of its “forecasting and related processes during times of significant uncertainty”.
The review comes after BoR governor Andrew Bailey admitted mistakes had been made in dealing with inflation and that it was taking “a lot longer than we expected” to come down.
Markets are now betting on interest rates peaking at 5.75% compared to the current level of 4.5%.
The BoE has faced criticism for failing to react fast enough in tackling prices.
11.45am: Rate expectations could push even higher
Laith Khalaf, head of investment analysis at AJ Bell, thinks it won't take much for interest rate expectations to hit 6%.
Markets are currently expecting rates to peak at 5.75%, after soaring in the last month, following stronger-than-expected UK inflation figures and accelerating wage growth.
Khalaf said: "A few hawkish comments from the Bank of England, or some more ugly inflation data, could easily tip those expectations up to 6%."
"While interest rates may not ultimately hit those heights, those expectations do set market pricing in the here and now for government bonds, cash accounts and mortgages," he said.
He thinks “The Bank of England is caught between a rock and a hard place, as it has to choose between pushing more mortgage borrowers towards the brink and letting inflation run riot."
"The latest readings for core inflation and wage growth have come in hot, and that has spooked the market, sending gilt yields skywards and raising expectations of more interest rate hikes to come," he added.
11.16am: Frasers increases Asos stake over 10%
Frasers has bought another chunk of Asos stock, taking its shareholding over 10%.
The retailer now holds an interest of just under 10.6% after picking up 865,000 shares on June 12.
That means Frasers is in a position where it could block the automatic takeover of its shares by any bidder for the troubled online fashion retailer.
Last week, Asos told the City that Frasers had lifted its stake twice in a matter of days from 7.4% to 8.6% and then to 9.86%.
It already looks like reasonable business with Asos shares up 15% after an encouraging trading update.
Asos is seen as a possible takeover target with Frasers a possible suitor. Reports last week linked Asos to an approach from Turkey's Trendyol, backed by Chinese e-commerce giant Alibaba.
10.50am: Issa brothers close to Asda store deal
The billionaire Issa brothers are on the verge of selling off a chunk of Asda’s property empire to a US investor in a deal worth £650mln, according to The Times.
Mohsin and Zuber Issa, who bought the supermarket giant in 2020 with the private equity firm TDR Capital, are targeting sale and leaseback transactions for the grocer’s estate to try to bring down the firm’s hefty debt pile amid soaring interest rates.
The Times said Realty Income Corp, a New York-based investor, is said to be close to buying about 25 Asda stores on leases of up to 20 years, citing React News, an industry newsletter. The price tag equates to a net initial yield of about 6.5%.
Realty Income Corporation bought £429 million worth of Sainsbury’s portfolio as its debut UK deal in 2019. Since then, it has bought retail parks, supermarkets and logistics units in the UK.
10.09am: Melrose falls as CEO offloads shares
Shares in Melrose Industries have fallen after chief executive officer Simon Peckham sold 2mln shares in the firm - half his stake - at 524.5p "as a result of a change in personal circumstances".
Peckham still holds just over 2mln shares and "has no current intention to sell any further shares", Melrose said.
Shares are trading 2.7% lower at 510.20p each in London.
10.01am: L&G slips as unveils new CEO
A cautious reaction to the appointment of a new CEO at Legal & General Group PLC (LSE:LGEN).
Russ Mould at AJ Bell thinks "the new boss at Legal & General has a hard act to follow. Since Nigel Wilson was appointed to the top job in June 2012, Legal & General shares have outperformed its life insurance peers, Aviva and Prudential, to chalk up a total return of more than 200%."
“Wilson didn’t necessarily make a big splash but was busy in the background, turning Legal & General into a more focused and efficient business," Mould explained.
“This could provide his successor, Antonio Simoes, with the opportunity to take Wilson’s approach of focusing on long-term assets and so-called ‘inclusive capitalism’ to another level, but that comes with uncertainty too after more than a decade of leadership continuity", he pointed out.
“The initial market reaction betrays at least some investor nervousness, even though Wilson will stay on board until January to help smooth the succession.”
Shares in L&G are 2.6% lower at 231.80p per share.
9.35am: Borrowers face biggest mortgage squeeze since 1990s
Although UK interest rates have risen from .1% to 4.5% in the last 18 months, they are still well below the levels seen in the 1990s housing crash.
But, as Ed Conway of Sky News explains, borrowers are already facing a big mortgage squeeze (once you adjust for the size of mortgages, and people’s disposable income as a proportion of those payments).
In a detailed analysis, Conway pointed out money markets are now pricing in interest rates of 5.75% by early next year, a “massive change from only a month ago, when they thought rates might peak under 5%.”
????Blimey
UK money markets now pricing in @bankofengland interest rates of 5.75% by early next year.
That’s a massive change from only a month ago, when they thought rates might peak under 5%.
Things looking increasingly grisly for mortgage payers/the housing market pic.twitter.com/7S9OCon9uu
— Ed Conway (@EdConwaySky) June 14, 2023
Conway then explains why is it such a big deal.
Right now, the average two year fixed rate deal is 5.9% according to Moneyfacts. The average 5 year deal is 5.54% which taking the lower rate is the highest since 2008.
But adjusting for the fact that these days people have bigger mortgages and lower incomes versus their monthly payments the mortgage burden is much higher.
He said right now, based on rates currently available, those refixing or taking out new loans are entering the biggest mortgage squeeze since 1991.
9.06am: Get used to higher rates says former Bank boss
Mark Carney, the former Bank of England governor, said interest rates will remain high for years to come, ensuring governments and consumers will pay more to service debt.
The UK is “going to be paying higher rates of interest for their debt for the foreseeable future,” he said in an interview with Robert Peston on ITV last night.
Important interview with ex Bank of England governor Mark Carney on #peston tonight. It will help you to understand what your finances will look like in coming years. 10.45 ITV. 9 on Twitter via @itvpeston https://t.co/ntcusCnD8L
— Robert Peston (@Peston) June 14, 2023
The higher borrowing costs, he said, represent “big tectonic shifts in the global economy” and “mean that we are likely to have higher longer term interest rates for a period of time”.
“One of the things that governments in the UK, and Canada, elsewhere have to get used to, now, is that they are going to be paying higher rates of interest for their debt for the foreseeable future,” he said.
“We are likely to have higher longer-term interest rates for a period,” he added.
Separately, Sushil Wadhwani, a former member of the Bank of England’s monetary policy committee, told the BBC’s Today programme that failing to fight infation now risks making the situation worse.
“Inflation ultimely is the enemy of growth. It’s very important for us to get inflation down if you want sustainable growth,” she said.
“If we delay raising rates then we might find the disease gets worse and we might then find that we have to do even more and experience even worse side effects.”
8.52am: Informa gains but Halma guidance disappoints
The FTSE 100 remains in the red, but the losses are modest, down 8 points, at 7,595.
Leading the fallers is Halma PLC (LSE:HLMA) despite the firm reporting announcing record revenue.
Shares fell 5% as analysts highlighted slightly weaker guidance than the market was looking for.
Matt Britzman at Hargreaves Lansdown said: "Guidance here was a little lower than markets were expecting, with return on sales expected around 20% for the coming year – analysts had pencilled in 20.4%."
He also noted there was some weakness in margins due to supply chain disruption.
This offset the better news of "record full-year record and profit" although he pointed out this ws flattered by "weaker sterling which meant its overseas income was worth more."
Leading the FTSE 100 risers is Informa PLC (LSE:INF). Shares in the events organiser, rose 4% in early exchanges, following an upward revision of its annual profit and revenue forecast.
Boosted by a solid performance in its academic and B2B markets divisions, Informa predicts a 10% rise in its adjusted operating profit for the year ending December 31 to between £709-£750mln.
Asos PLC shares rose 12% as the firm backed its full-year guidance as it returned to profit in the financial third quarter.
It also said it had achieved £200mln of profit optimisation and cost savings in the year-to-date and was on track to deliver c.£300mln of benefits targeted in financial year 2023, which equates to c.£385mln of gross annualised benefits.
Analysts at Peel Hunt said: "This isn’t a quick turnaround and certainly doesn’t answer the question of how ASOS returns to growth in the US."
"However, sorting out the balance sheet, running a more efficient stock model and shifting to a more profitable KPI set is the first stage to stability."
"Today’s reiteration and the £600m FY24 stock target should give investors more confidence on the direction of travel and we expect the shares to bounce this morning. No change to forecasts," the broker added.
8.17am: Cautious start in London
The FTSE 100 edged lower at the open after the US Federal Reserve held interest rates but signalled further hikes were on the way while the fall-out from the pulled float of WE Soda rumbled on.
At 8.15am, London’s lead index stood at 7,596.08, down 6.66 points, while the broader FTSE 250 rose to 19,195.03, up 19.53 points.
"Nearly all committee participants expect that it will be appropriate to raise interest rates somewhat further by the end of the year. But at this meeting, considering how far and how fast we’ve moved, we judged it prudent to hold the target range steady," Fed Chair Jerome Powell told reporters at his post-meeting press conference.
Economists described the move as a “hawkish hold” and were split as to whether the Fed will extend the pause at its July meeting.
ING’s James Knightly said that “with the disinflationary trend set to accelerate, we see an extended pause."
Richard Hunter, head of markets at interactive investor, said: “Any thoughts of rate cuts this year finally evaporated.”
“Although rates were unchanged for the first time in many months, the Fed surprised investors with a suggestion that two further rises could be in the pipeline this year, depending on ongoing economic data.”
Back in London, and WE Soda chief executive Alasdair Warren told the BBC that issues of valuation drove the decision to pull its eagerly awaited IPO.
Speaking to Radio 4, he said that the breadth of engagement from potential investors was there but that valuations were “unrealistically low.”
He also cast doubt over whether the firm would list in London should the firm decide to go down the IPO route again.
He stressed the decision to pull the float was a “function of the market, rather than the company.”
Diageo fell 1.6% as Goldman Sachs (NYSE:GS) downgraded to neutral from buy but online retailer Asos jumped after backing guidance despite reporting a fall in sales.
7.54am: Halma boosts dividend again
Halma PLC (LSE:HLMA) reported a 44th consecutive year of dividend growth of 5% or more as it unveiled a jump in revenue and underlying profit.
In the 12 months to 31 March 2023, revenue rose 21% to £1.85bn, adjusted profit before tax grew 14% to £361.3mln while the full-year dividend was boosted 7% to 20.20p.
Chief executive Marc Ronchetti said: “We delivered record revenue and profit, achieving our 20th consecutive year of profit growth and our 44th consecutive year of dividend per share growth of 5% or more.”
Growth was broadly spread across Halma's sectors, regions and companies, with adjusted profit rising in all sectors.
7.51am: Asos backs guidance despite sales fall
Troubled online retailer, Asos is backing its full-year guidance despite reporting sales have continued to fall.
Sales in the three months to 31 May fell 14% to £858mln, while sales in the year so far were down 9% to £2.69bn, according to a statement.
However, the beleaguered online retailer said the fall in sales reflects “deliberate actions on capital allocation to improve profitability.”
Asos said it returned to profitability in the third quarter, with adjusted earnings before interest and tax (EBIT) up more than £20mln year-on-year.
7.41am: WE Soda boss blames "unrealistically low" valuations for pulled float
WE Soda Chief Executive Alasdair Warren told the BBC that issues of valuation drove the decision to pull its eagerly awaited IPO.
Speaking to Radio 4, he said that the breadth of engagement from potential investors was there but that valuations were “unrealistically low.”
He accepted that IPO valuations usually implied a discount to fair value but said this discount had “effectively doubled.”
This meant valuations were at a level that didn’t “make any sense for the company.”
While it made sense to list in London now, Warren said he may have to reconsider plans should they decide to float in the future.
He said it would depend on IPO market conditions in Europe and the balance of business between the US and Europe at the time.
He stressed the decision to pull the float was a “function of the market, rather than the company.”
Warren reckons it will take some time, and probably a period of market strength, before there is an appetite for IPOs to work.
The IPO would have been the largest float in London this year with the firm, the world's largest producer of natural soda ash, expecting to be valued between US$7.5bn to uS$8bn.
7.15am: L&G names Santander exec as new CEO
Legal & General Group PLC (LSE:LGEN) has named António Simões as its Chief Executive, succeeding Sir Nigel Wilson who is stepping down after 11 years at the helm.
Simoes joins from Banco Santander (LSE:BNC) where he has been Regional Head of Europe since September 2020. He has Santander's businesses in the UK, Spain, Portugal and Poland, working across retail and commercial banking, corporate and investment banking, wealth management and insurance.
Prior to joining Santander, he spent 13 years at HSBC, including as CEO of UK and Europe, and latterly CEO of Global Private Banking, based in London and Hong Kong. He is a former McKinsey & Company partner.
Sir John Kingman, L&G chair, said Simoes “brings a formidable leadership track record at the most senior level of financial services.”
7.00am: FTSE called lower after Fed's hawkish hold
The FTSE 100 is expected to open lower after the US Federal Reserve left interest rates unchanged but signalled further hikes were on the way.
Spread betting companies are calling London’s lead index down by around 10 points.
"Nearly all committee participants expect that it will be appropriate to raise interest rates somewhat further by the end of the year. But at this meeting, considering how far and how fast we’ve moved, we judged it prudent to hold the target range steady," Fed Chair Jerome Powell told reporters at his post-meeting press conference.
Most committee members are projecting two additional quarter-point increases this year in a move that would lift the benchmark rate to between 5.5% and 5.75%, according to an updated “dot plot” published on Wednesday.
US markets ended mixed on the news. The Dow Jones Industrial Average closed down 232.79 points, or 0.7%, at 33,979.33. The S&P rose 3.58 points, 0.1%, at 4,372.59, and the Nasdaq Composite gained 53.16 points, 0.4%, at 13,626.48.
James Knightley at ING Economics called it a "hawkish hold."
Although Powell indicated July is a 'live' meeting, a one-meeting pause "makes little sense" given the long lags involved with monetary policy, he felt.
"With the disinflationary trend set to accelerate, we see an extended pause," he said.
In Asia, markets rose as after the People’s Bank of China cut its medium-term policy rate in the face of slowing economic growth. Retail sales and industrial production figures both came in below forecast.
The gains came after the PBoC lowered its medium-term lending facility rate by 0.1 percentage point to 2.65%, having cut its seven-day lending rate earlier in the week by the same amount.
The Shanghai Composite gained 0.6%, the Hang Seng in Hong Kong rose 1.6% and in Tokyo, the Nikkei advanced 0.3%.
Back in London, and the early focus will be updates from Halma and Bunzl while the European Central Bank will make its rate call later in the day.
The ECB is expected to increase rates by 25 basis points.